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The simple moving average

The simple moving average - T he simple moving average(SMA...

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The simple moving average (SMA) used as a three month moving average predicts years 2007 to 2009 and provides a forecast for 2010. The SMA used shows the unweighted mean value, as calculated over quarters. SMA indicates that the demand will go down steadily starting from the third quarter of 2007 to first quarter of 2009. At the first quarter of 2009 it begins to quickly drop off. As seen in Figure SMA 1, the quantity drops from 337769 to 186921, the error moves into a large negative at (122,125.67), it is largest error squared at 19,914,678,458.7, and largest percent error at 65.34%. This indicates that demand will look to be tapering off at the end of the last quarter. The results of SMA with regards to CSE, MAD, MSE, and MAPE are -1,760,99.00, 40,177.10, 2,752,568,810.32, and 17.48% respectfully, as indicated in Figure SMA 1. Looking at a few of these can show us a better picture of what’s going on and what may happen. Since cumulative forecast error (CSE) is the total of the error it is shown that it is negative. A negative in this column indicates that the total forecasted demand is much later then the total actual demand. This could mean that in the future we may predict much more than needed. The MAPE or mean average percent error is the difference between A t and F t is divided by the actual value A t again. So, moving forward the 17.48% signifies the error in which we may see in future forecasting using SMA.
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